Another sloppy business deal

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Another sloppy business deal

The Ministry of Health and Welfare announced it will not allow a Chinese hospital to be built on Jeju Island in what could have been the country’s first for-profit facility. The ministry said it came to the decision after reviewing the business plan for Shaner Hospital, but it has been sloppy throughout the business deal process.

The plan for Shaner Hospital was reported to President Park Geun-hye during a trade promotion conference last month. The Ministry of Strategy and Finance said in a press release that the licensing had been delayed due to a lack of emergency facilities, but that the hospital would be able to open if it specialized only in dermatology and cosmetic surgery for Chinese clients.

The head of the Chinese parent company of the hospital, Tianjin Huaye Group, was arrested in July last year for fraud and other criminal charges. Chinese media reported that China Stem Cell, the company seeking to build the hospital on Jeju on behalf of Tianjin Huaye, was a paper company based in the Virgin Islands and therefore had no stem cell-related technology. Both the health ministry and the Jeju provincial government were aware of the scam. The ministry informed the Jeju government of the Chinese media report on CSC in October. Jeju officials said they had checked on matters and responded that there was no problem with the business deal. In May, the health ministry asked the Korean Embassy in Beijing to confirm the arrest of the group’s owner. The embassy declined to cooperate, saying it was a personal affair. The Chinese had already put the lot purchased for the hospital up for sale and were withdrawing from the project. Yet the ministry still said the project was a major foreign investment deal for this year.

Shaner did not qualify for a decent hospital from the start. Total investment was 50.5 billion won ($48.8 million) for a 48-bed hospital employing one hundred staff. It would not have stood a chance against Korean cosmetic hospitals in scale or skill. More than a decade has passed since for-profit hospitals were allowed in economic free zones, but not one has been opened. From the sloppy way bureaucrats do business, we can hardly expect any in the future either.

JoongAng Ilbo, Sept. 17, Page 34

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